On November 8th, I had the pleasure of attending a professional football game in Jacksonville, Florida. The Jaguars were playing the Kansas City Chiefs and it so happened that on that very Sunday it was Military Appreciation Day at Jacksonville Municipal Stadium. There were hundreds of soldiers in fatigues, officers, and the whole shebang.
Prior to the beginning of the game they had a presentation by the military displaying the flag of the United States and a fly over of a B-2 bomber, each of which cost approximately $2.1–2.2 Billion. The halftime show consisted of 150 teenagers on the 50-yard line enlisting and swearing their oaths to the Military Industrial Compl-oops, the Constitution, by repeating the General who was leading the recitation.
It's no wonder we are such a militaristic society, it is indeed hard not to fall prey to the propagandized displays of enormous flags (made in China perhaps?) and $14,000/hr (approximately in 2005 Dollars) flyovers of bombers that can carry nuclear weapons that can annihilate entire countries. It does get to your head when at every break in a professional football game you hear about how great our military is and how we are so thankful for their protection of our freedoms in Iraq and Afghanistan.
Before I finish this personal experience and get to my point I would like to share one thing. There was an incredibly touching moment when a soldier stationed in Iraq was on the big screen talking about his family and the football team of his native city of Jacksonville. He got a loud pop from the crowd which proceeded with the cameramen showing this soldier's family on the big screen where even more applause ensued. However, what truly made this a great moment was that as the family was waving to the crowd in the end zone, out comes this soldier supposedly speaking live from Iraq running into the field. Once his son caught sight of him it was one of the most emotional scenes I have ever experienced and a type of happiness that cannot often be shared by so many thousands at once, rejoicing at this little boy's love for his father and how happy he was to see him home. I turned to my brother who was at the game with me and asked him, now imagine if they brought them all home?
I would like to direct my attention now to the topic at hand. I have heard this line being pushed on people by several news organizations; economists and the like all parrot the phrase that any war or its effort is a boon to the economy. It is here where my title comes in handy because it is not a boon at all but it should rather be said that it is a boom to the economy which is analogous to what a target looks like after this sound is heard in a battle. Therefore with any war effort you can hear the proverbial missiles being targeted towards the private economy and its consumer goods and demands.
It is true indeed that productivity goes up and unemployment may go down when a nation is engaged in a full-scale war. Output does increase, but the output being produced is not the same output that would have been produced absent the war. It is clear to see the difference by simply looking at our own Nation during World War II.
Many economists and college professors and establishment historians espouse the same message by saying that WWII helped the country get out of the depths of the depression along with Government stimuli, but the focus here will be on the "war effort" as a boon to the nation's economy. What follows is purely an economic analysis of WWII.
With the onset of the US involvement in the war, Government expanded at a rate that surmounted any previous growth (Great Depression aside). It simply became involved in all aspects of the individual's life, moral and societal behavior. This expansion led to a surge in demand for positions within the bureaucracy of the Federal Government. Many were employed. Those previously unemployed were required to help in any way to provide for the needs of the country and its military fighting overseas.
The Government also employed millions of able-bodied men to fight for the nation. Factories were re-tooled to build all the necessary war machines, planes, tanks, and jeeps. Shipyards were retrofitted to accommodate the construction and assembly of large naval vessels to patrol the seas. The demand in raw materials was exponentially higher and all resources were reallocated towards the war effort. Women, teenagers and the elderly replaced 29% (1) of the pre-existing labor force that was drafted into the service at some point during the war. The country was at constant production, real GDP growth was at 13% (1) per annum during that period! This short summary in anyone's view can propose a positive outlook on how the war did aid the country by creating jobs and helping jumpstart a depressed economy. However one must take a step beyond the conventional wisdom and ask him or herself, "but at what cost?"
The claims that the above was a "good" thing are questionable since war regardless of victory or loss is never good for a country. Let's analyze the first point relating to the surge in Government jobs and the expansion of the federal Government's size. In any nation's economy, there needs to be a balance, a ying and a yang just as in any other aspect of life. You cannot have too much of one thing and too much of another. This leads me to the point that as the Public sector (Gov't) grows and expands it crowds out any private sector growth. It sucks up the resources that would otherwise be readily available to work in the private sector into its vacuum. Resources that could have created innovations, invented new processes are now working in an environment conducive of routine non-creative work that produces zero goods or products that may improve standards of living.
It is morally devious to claim that unemployment went down during the war effort as productivity went up and jobs were created. This statement completely ignores the fact that in conjunction with the aforesaid, millions were drafted into the war effort and killed overseas. This would of course lead to lower "unemployment" numbers.
Resources were reallocated to the war effort. This simply means that instead of these goods being put to productive measures in society they were being utilized en masse for the murders of millions of others. Not only was this a detriment to the private sector it is destruction of wealth as natural resources and goods that the nation possesses were squandered and entirely lost which led to massive waste. How are destruction of resources and capital ever a good thing for a society?
Therefore the resources that go toward the improvement of the standard of living of a society diminish in availability as it is crowded out by the demand imposed via the war. Factories that were once focused on consumer goods and electronics, vehicles, and other machinery are no longer actively producing such items. The private sector now must perform the same amount of work with less available capital which inevitably led to shortages and Government rationing. Life did not get better as individuals had to make do with a limited availability of goods that were heretofore abundant.
Additionally a labor force of experienced able-bodied men was now overseas fighting for their lives and in their stead were women, teenagers and the elderly. How can this possibly mean that productivity was higher? This meant that housewives had to work for a living because their husbands were off fighting the war. Most women had no prior experience of manual labor and work, and neither did the teenagers. This ensured that training was required to get this new inexperienced workforce up to par with the previous one. Also from a moral standpoint, the stay at home mother now was required to go to work which slowly ate away the very fabric of family this nation was built upon and it set major societal precedents for the future.
The number of men that could have otherwise been in the country creating innovations, inventions, producing goods, engaging in entrepreneurship, creating new jobs and businesses were now engaged in a valiant but unproductive effort economically speaking. The domestic economy suffered from this. Instead of coming up with ideas for business ventures or new processes, such men were just trying to stay alive and many of them perished. No one knows truly how much invaluable personal and material wealth the country lost during that period of time.
Meanwhile we are supposed to believe that when the original labor force of men returned home the government's numbers of real output decreased by 22 percent (1). During that time the nation was told that once all men were to return and the war would end that the country would spiral into another economic bust since military spending would be slashed (hence the 13% GDP during the war years as Gov't expenditures account for a high percentage of GDP calculations). Of course official numbers would lead one to believe that 1946, the year immediately following the end of war was abysmal. This is pure nonsense since wealth originates in the private sector and during that year the Government itself was cut in size considerably, finally loosening its tight grip around the neck of the private economy. This resulted in a true boon to the economy once all controls were removed.
If war truly creates prosperity through sales of munitions and war materials, why not engage in continuous full-scale war since that would most certainly guarantee unending prosperity. The country could hold hands together and jump for joy as to how much wealthier we are by devoting precious resources to the production of things that will ultimately be destroyed. The country should also engage in the destruction of entire towns and razing of cities so they can all be rebuilt and generate new shovel-ready public works programs! The possibilities are endless!
I write this article amidst the beating drums of war towards Iran that seem to be getting louder and louder. In this current economic crisis perhaps the old line of "war creates jobs" may be once again heard around the nation by pundits and pedagogues.
November 27, 2009
